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"...but the real reckoning came almost as soon as the ink dried on the 1999 trade agreement the United States signed with China. Wages were so cheap there that

"...but the real reckoning came almost as soon as the ink dried on the 1999 trade agreement the United States signed with China. Wages were so cheap there that (aided by the occasional World Trade Organization violation) Chinese companies could import U.S. lumber and ship the final product back by the container load and still sell their goods for less than U.S. companies paid in material costs." It's easy to skim over this section without realizing how insane this is. Example: my brother works in the wood industry for a company producing wooden floors based in the Netherlands. They source the wood from a production forest in Belgium. From Belgium's Antwerp harbor it would be an extremely short route to Rotterdam, after which the wood can be processed. No. Instead, from Antwerp it's shipped half-way across the planet to China. There it is sawed into boards, grinded, and shipped to Rotterdam, again crossing half the planet. Back in the Netherlands, they do some finishing touches like sawing custom sizes and applying polish. Can you fucking believe this? We're talking about trees here, they're absurdly heavy. They're making a full round trip across the planet. Whilst 75% of the work on those trees is machine-based. The trees and the people/machines are right next to each other. And still we can't make the economics work. That's because the economics are a scam. Trade deals, subsidized shipping, state sponsorship from China. You can't compete on wages when everything is asymmetrical.

Zircom 4y ago
We just don't care enough. The amount of apathy the average person in a developed country has for the rest of their fellow man is astounding if you stop and think about it for a bit. People love to go on and on about how capitalism is good and paying them pennies isn't exploitation, we're lifting countries up into the "first world" and that's true to an extent, while conveniently ignoring that the countries being lifted up are either suffering for it themselves or are just shifting the exploitation farther down the line. Eventually we're gonna run out of people to shit on in order to make our lifestyles possible, and that's when it'll get interesting. I've already written about this before on here so I'll just plop that down instead of rehashing it more: I've read that there is a certain number of people that we're basically optimized to coexist within a societal structure, and modern civilization passed that a long time ago, and human beings in general just aren't capable of empathy on the scale of modern civilization. And I mean, it makes sense when you think about it. On some abstract level you have to know that even meagre standards of living in western society requires someone, somewhere to be suffering to provide it. $1 for a pound of bananas shipped from across the world before they even have a hint of yellow on them? That shit don't come without a cost, and our $1 sure as hell aint paying it. But we all just kind of don't think those people just to get through the day, because dwelling on the extent of suffering and horror we've wrought upon our fellow man in pursuit of whatever fresh hell the guys over at Oreo have managed to shape into the general form of a cookie would leave us a broken shell of a person and unable to show up for our next shift at the Big Mac factory.
- sanitycheck 4y ago
  Well, it's insane. But I'm sure I can think of hundreds of other equally insane things. What can I do about any of them? Very little if I reject society, live in a cave and forage for berries. Also very little if I attempt to enter politics, even if moderately successful. So I buy the fair trade bananas - for all the good that'll do - and try to tolerate all the madness.
- dahwolf 4y ago
  "We just don't care enough. The amount of apathy the average person in a developed country has for the rest of their fellow man is astounding if you stop and think about it for a bit." I wasn't going for that angle. I wasn't talking about the labor part. I accept that labor competes internationally. I have no moral right to a higher pay for the same work. That's not the issue. The issue is that it shouldn't be possible to ship an oak tree across the entire planet for practically nothing. The true cost is not nothing, it has to be enormous. The "natural" pricing is heavily distorted by subsidies, trade deals, lack of taxation, dismissing all externalities, state sponsorship, the like. None of this has anything to do with fair competition based on labor. It's a rigged game.
  - nostromo 4y ago
    You see this all the time in the US. I can get an item shipped to me from China on Aliexpress for a few cents or even free. The same package shipped to me from my own city costs several dollars. Business interest in the US totally screw over local producers and few politicians seem to care.
  - dirtyid 4y ago
    >it shouldn't be possible to ship an oak tree across the entire planet for practically nothing Why not? Modern lumber carrier vessels are massive. Optimizing for maritime bulk cargo transport to ship across world economically vs western wages seems very feasible.
    - FeloniousHam 4y ago
selestify 4y ago
> still sell their goods for less than U.S. companies paid in material costs I don’t get how this part is possible. How are the Chinese paying less than the Americans for imported wood?
- kybernetyk 4y ago
  State manipulation of the market.
- brippalcharrid 4y ago
  Same way that they pay less to send mail to the USA than people in the US pay to send mail domestically (but not the reverse); through treaties and long-standing trade agreements that provide opportunities for arbitrage by outsourcing things that developed countries don't necessarily want to be directly involved in. And that includes dealing with labour unions, if they become too militant or resistant to modernisation.
  - fragsworth 4y ago
    Do Chinese companies have less trouble with labor unions? I thought communists are all about that stuff
    - brippalcharrid 4y ago
      Unions are restricted to certain industries, and they are basically all controlled by the government, so that puts an upper limit on the amount of "trouble" in industrial relations. Much of the country is in a "developing" state, and there is competition for jobs in the cities. The pre-1980s weren't that long ago in the collective consciousness, and while policies and initiatives may have changed, the same people are in charge.
    - azubinski 4y ago
      This is a _very_ funny question
      - 4y ago
bsder 4y ago
> The trees and the people/machines are right next to each other. And still we can't make the economics work. That's because the economics are a scam. Trade deals, subsidized shipping, state sponsorship from China. You can't compete on wages when everything is asymmetrical. That's not the primary problem. The primary problem is "customer service" and that means that there is NO middle market in anything. There is cheap, high-volume crap optimized to the penny with no customer service and there is fully-custom, super expensive high end stuff with great customer service. Fixing any complaint or fault is expensive if you're not in the high-volume camp. If you're in the high-volume camp you simply say "We'll comp you a new one" and you're done. If you're in the low-volume camp, to fix things, you're rolling a human to make sure something is broken and worth fixing. With furniture, maybe you have to roll shipping. Then you have to do the fix. And then you have to roll it back. At the end, that's probably $500+ for furniture. If it's really bad, you're sending a whole new thing ($2K+). Did you make enough profit on your other sales to compensate for that? This "missing middle" due to customer service is the bane of everything right now. It even infests high tech stuff like test instruments. There are $1K or less things with no customer service or $100K things with great customer service and excellent quality. However, the $5K-$10K things get squashed.
jhanschoo 4y ago
> No. Instead, from Antwerp it's shipped half-way across the planet to China. There it is sawed into boards, grinded, and shipped to Rotterdam, again crossing half the planet. Back in the Netherlands, they do some finishing touches like sawing custom sizes and applying polish. Does any portion of the lumber remain in China for the Chinese market?
- dahwolf 4y ago
  No. The trees are owned by the Dutch company and they don't have a license to sell there. The customers of the end product are all in western Europe.
bravo22 4y ago
> That's because the economics are a scam. No. It means there is someone in China who is willing to do the work cheaper than someone in Europe. If you beleieve they should be paid more for the same work, then great give those people money so they have the option of saying no to the "explotative" work. But the idea that other people should not have the job because it isn't fair, is what kids would these days call "peak white supremecy" [TM], i.e. Europeans don't have the right to a job any more than other people in the world do. Historically they've ensured this through colonialism and war -- everyone around the world has done that. Now because of technological advancement a poor villager in China has the opportunity to say yes I want to do this work and take that job away away from his European counterpart. Are they getting off worse than the Europeans? Absolutely but it is better than being even worse off. If you want higher wages for them pass a law that bans Europeans from doing the work and I promise you wages will rise in China. > You can't compete on wages when everything is asymmetrical. You can't because what a European worker demands from others around the world is more than what a Chinese worker demands. This is both in terms of relative purchasing power in the country, and between countries.

Zircom 4y ago

We just don't care enough. The amount of apathy the average person in a developed country has for the rest of their fellow man is astounding if you stop and think about it for a bit. People love to go on and on about how capitalism is good and paying them pennies isn't exploitation, we're lifting countries up into the "first world" and that's true to an extent, while conveniently ignoring that the countries being lifted up are either suffering for it themselves or are just shifting the exploitation farther down the line. Eventually we're gonna run out of people to shit on in order to make our lifestyles possible, and that's when it'll get interesting. I've already written about this before on here so I'll just plop that down instead of rehashing it more: I've read that there is a certain number of people that we're basically optimized to coexist within a societal structure, and modern civilization passed that a long time ago, and human beings in general just aren't capable of empathy on the scale of modern civilization. And I mean, it makes sense when you think about it. On some abstract level you have to know that even meagre standards of living in western society requires someone, somewhere to be suffering to provide it. $1 for a pound of bananas shipped from across the world before they even have a hint of yellow on them? That shit don't come without a cost, and our $1 sure as hell aint paying it. But we all just kind of don't think those people just to get through the day, because dwelling on the extent of suffering and horror we've wrought upon our fellow man in pursuit of whatever fresh hell the guys over at Oreo have managed to shape into the general form of a cookie would leave us a broken shell of a person and unable to show up for our next shift at the Big Mac factory.

sanitycheck 4y ago
Well, it's insane. But I'm sure I can think of hundreds of other equally insane things. What can I do about any of them? Very little if I reject society, live in a cave and forage for berries. Also very little if I attempt to enter politics, even if moderately successful. So I buy the fair trade bananas - for all the good that'll do - and try to tolerate all the madness.
dahwolf 4y ago
"We just don't care enough. The amount of apathy the average person in a developed country has for the rest of their fellow man is astounding if you stop and think about it for a bit." I wasn't going for that angle. I wasn't talking about the labor part. I accept that labor competes internationally. I have no moral right to a higher pay for the same work. That's not the issue. The issue is that it shouldn't be possible to ship an oak tree across the entire planet for practically nothing. The true cost is not nothing, it has to be enormous. The "natural" pricing is heavily distorted by subsidies, trade deals, lack of taxation, dismissing all externalities, state sponsorship, the like. None of this has anything to do with fair competition based on labor. It's a rigged game.
- nostromo 4y ago
  You see this all the time in the US. I can get an item shipped to me from China on Aliexpress for a few cents or even free. The same package shipped to me from my own city costs several dollars. Business interest in the US totally screw over local producers and few politicians seem to care.
- dirtyid 4y ago
  >it shouldn't be possible to ship an oak tree across the entire planet for practically nothing Why not? Modern lumber carrier vessels are massive. Optimizing for maritime bulk cargo transport to ship across world economically vs western wages seems very feasible.
  - FeloniousHam 4y ago

selestify 4y ago

> still sell their goods for less than U.S. companies paid in material costs I don’t get how this part is possible. How are the Chinese paying less than the Americans for imported wood?

kybernetyk 4y ago
State manipulation of the market.
brippalcharrid 4y ago
Same way that they pay less to send mail to the USA than people in the US pay to send mail domestically (but not the reverse); through treaties and long-standing trade agreements that provide opportunities for arbitrage by outsourcing things that developed countries don't necessarily want to be directly involved in. And that includes dealing with labour unions, if they become too militant or resistant to modernisation.
- fragsworth 4y ago
  Do Chinese companies have less trouble with labor unions? I thought communists are all about that stuff
  - brippalcharrid 4y ago
    Unions are restricted to certain industries, and they are basically all controlled by the government, so that puts an upper limit on the amount of "trouble" in industrial relations. Much of the country is in a "developing" state, and there is competition for jobs in the cities. The pre-1980s weren't that long ago in the collective consciousness, and while policies and initiatives may have changed, the same people are in charge.
  - azubinski 4y ago
    This is a _very_ funny question
    - 4y ago

bsder 4y ago

> The trees and the people/machines are right next to each other. And still we can't make the economics work. That's because the economics are a scam. Trade deals, subsidized shipping, state sponsorship from China. You can't compete on wages when everything is asymmetrical. That's not the primary problem. The primary problem is "customer service" and that means that there is NO middle market in anything. There is cheap, high-volume crap optimized to the penny with no customer service and there is fully-custom, super expensive high end stuff with great customer service. Fixing any complaint or fault is expensive if you're not in the high-volume camp. If you're in the high-volume camp you simply say "We'll comp you a new one" and you're done. If you're in the low-volume camp, to fix things, you're rolling a human to make sure something is broken and worth fixing. With furniture, maybe you have to roll shipping. Then you have to do the fix. And then you have to roll it back. At the end, that's probably $500+ for furniture. If it's really bad, you're sending a whole new thing ($2K+). Did you make enough profit on your other sales to compensate for that? This "missing middle" due to customer service is the bane of everything right now. It even infests high tech stuff like test instruments. There are $1K or less things with no customer service or $100K things with great customer service and excellent quality. However, the $5K-$10K things get squashed.

jhanschoo 4y ago

> No. Instead, from Antwerp it's shipped half-way across the planet to China. There it is sawed into boards, grinded, and shipped to Rotterdam, again crossing half the planet. Back in the Netherlands, they do some finishing touches like sawing custom sizes and applying polish. Does any portion of the lumber remain in China for the Chinese market?

dahwolf 4y ago
No. The trees are owned by the Dutch company and they don't have a license to sell there. The customers of the end product are all in western Europe.

bravo22 4y ago

> That's because the economics are a scam. No. It means there is someone in China who is willing to do the work cheaper than someone in Europe. If you beleieve they should be paid more for the same work, then great give those people money so they have the option of saying no to the "explotative" work. But the idea that other people should not have the job because it isn't fair, is what kids would these days call "peak white supremecy" [TM], i.e. Europeans don't have the right to a job any more than other people in the world do. Historically they've ensured this through colonialism and war -- everyone around the world has done that. Now because of technological advancement a poor villager in China has the opportunity to say yes I want to do this work and take that job away away from his European counterpart. Are they getting off worse than the Europeans? Absolutely but it is better than being even worse off. If you want higher wages for them pass a law that bans Europeans from doing the work and I promise you wages will rise in China. > You can't compete on wages when everything is asymmetrical. You can't because what a European worker demands from others around the world is more than what a Chinese worker demands. This is both in terms of relative purchasing power in the country, and between countries.